The verdict in three sentences
For a mid-sized company with 50 users, a SaaS at EUR 40 to 120 per seat per month adds up to EUR 120,000 to 360,000 over 5 years, versus EUR 105,000 to 262,500 for custom software including maintenance. The break-even point for custom arrives between 24 and 40 months when the process is specific and stable. SaaS remains the right call for standard needs (payroll, accounting, email) or teams under 20 people.
The components of total cost of ownership
TCO goes beyond the list price. On the SaaS side, add annual price increases (often 5 to 8%), paid modules and integrations. On the custom side, count corrective and evolutive maintenance, hosting and security.
| Cost item | Off-the-shelf SaaS | Custom software |
|---|---|---|
| Upfront investment | EUR 0 to 15,000 (configuration) | EUR 60,000 to 150,000 |
| Recurring cost | EUR 40 to 120 / user / month | 15% of build per year |
| Annual increase | 5 to 8% on licences | tied to maintenance |
| ERP or CRM integrations | EUR 3,000 to 20,000 via connectors | included in build |
| Hosting | included | EUR 150 to 600 / month |
| Cost of one extra user | one licence | near zero |
| Exit or reversibility | export often partial | code and data owned |
Five-year simulation for 50 users
Median 2026 assumption: SaaS at EUR 80 per user per month, or EUR 48,000 a year; custom software at EUR 100,000 with EUR 15,000 a year for maintenance and hosting. Cumulative costs excluding price increases:
| Year | SaaS cumulative | Custom cumulative | Gap |
|---|---|---|---|
| Year 1 | EUR 48,000 | EUR 115,000 | +EUR 67,000 for custom |
| Year 2 | EUR 96,000 | EUR 130,000 | +EUR 34,000 |
| Year 3 | EUR 144,000 | EUR 145,000 | near break-even (36 months) |
| Year 4 | EUR 192,000 | EUR 160,000 | EUR 32,000 saved |
| Year 5 | EUR 240,000 | EUR 175,000 | EUR 65,000 saved |
| Year 5 with +6%/yr SaaS increase | EUR 270,600 | EUR 175,000 | EUR 95,600 saved |
With 30 users, break-even moves beyond 5 years. With 100 users, it drops to 18 to 24 months. User count is therefore the first variable to check.
Criteria that decide beyond price
The number alone is not enough. Custom software only makes sense if your process sets you apart from competitors or if no SaaS covers it without Excel workarounds. Conversely, building custom payroll or accounting is almost always a mistake: regulations change every year and the vendor absorbs that cost.
| Criterion | Favours SaaS | Favours custom |
|---|---|---|
| Number of users | under 30 | over 50 |
| Process | market standard | specific, source of advantage |
| Regulatory change | high (payroll, accounting, VAT) | low |
| Time to start | under 1 month | 3 to 6 months acceptable |
| Vendor lock-in | acceptable | critical risk (price, shutdown, acquisition) |
| Internal integrations | 1 or 2 | 4 or more |
| In-house IT team | none | at least one owner |
Vendor lock-in deserves its own line: acquisition, 20 to 40% increase at renewal, a feature removed. A custom contract should include transfer of code ownership, documentation and source escrow to neutralise the opposite risk, depending on the developer.
Mini case study
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Sophie, CFO of a technical distribution company, runs 55 sales reps and technicians on a field-service SaaS at EUR 95 per seat per month, or EUR 62,700 a year. The vendor announces +9% at renewal and charges EUR 18,000 for an ERP connector.
SaaS scenario over 5 years: EUR 62,700 in year one, then roughly +6% a year, close to EUR 353,000, plus EUR 18,000 for the connector: EUR 371,000. Custom scenario: EUR 130,000 build, EUR 19,500 a year of maintenance and EUR 4,800 of hosting, or EUR 251,500 over 5 years. Savings: EUR 119,500, break-even around month 30. Sophie starts with a EUR 6,000 scoping phase to secure the estimate.
FAQ
From how many users does custom software pay off?
Generally above 40 to 50 users, for a SaaS priced over EUR 60 per seat per month. Below 30 users, break-even often exceeds 5 years.
What maintenance budget should I plan for custom software?
Plan 15 to 20% of the build cost per year. For a EUR 100,000 build, that is EUR 15,000 to 20,000 annually, fixes and small enhancements included.
How do I avoid depending on the developer?
Require transfer of code ownership, a Git repository in your name and technical documentation. Mainstream technologies (TypeScript, PostgreSQL) make switching providers easier.
Can SaaS and custom be combined?
Yes, and it is often the best option: SaaS for accounting and payroll, a custom app for the core business, connected via API. Integration costs EUR 6,000 to 20,000 depending on the ERP.
How long does development take?
A EUR 60,000 to 150,000 business application ships in 3 to 6 months, with a first usable version around week 8 to 10.
Let's scope your project. Send us your user count, current licences and key processes: we will compare your SaaS TCO with a build between EUR 60,000 and 150,000 delivered in 3 to 6 months. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
